ETFs offer a number of benefits that can make them effective for 401(k) investors. They provide diversification, low fees, intraday liquidity, transparency, and much more.* And, as WisdomTree ETFs are built differently, they also offer investors thoughtful innovation, smart engineering and redefined investments.

In fact, our ETF family covers everything from equities to fixed income, alternatives and currencies around the world.

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Our experienced 401(k) team can help you find a wise way to make ETFs part of your 401(k) business.

As the 401(k) industry shifts its focus to cost and transparency, ETFs offer a number of benefits that can help address these needs.

Low-cost

ETFs are low cost tools for creating asset allocation portfolios and can often significantly lower costs to 401(k) participants.

Fully Transparent

ETFs hold underlying securities on a completely transparent basis. They have no 12b-1 fee1 structure so they are fee transarent, and are entirely suited to the requirement of complete fee disclosure.

Flexible

To achieve additional diversification, ETF portfolios can be easily combined with other investment options such as low cost actively managed mutual funds.

Omnibus Trading

ETFs can be traded on an omnibus basis2 in a 401(k) plan to substantially reduce or eliminate the normal trading commissions associated with their retail purchase.

Lower Fees

High fees may erode 401(k) plan performance. In fact, even a 1% difference in total fees can have a significant impact on participant savings—an effect that increases over time.

In the hypothetical illustration below, we show a higher fee versus a lower fee scenario, with average annual returns (avg. ann. returns) of 6.50% and 7.50% respectively on an initial investment of $25,000.

Over the course of 20 years, a $25,000 investment with 6.5% returns will grow to about $88,091.13

Over the course of 20 years, a $25,000 investment with 7.5% returns will grow to about $106,196.28

When you consider that retirement accounts can have a life of 30+ years, the impact of a seemingly small 1 percentage point difference in fees can truly be appreciated.

WisdomTree ETFs in a 401(k) Plan

ETFs when used within 401(k) portfolios offer several strengths that make them an effective long-term investment strategy. But not all ETFs are created equal. WisdomTree ETFs are built differently and offer benefits that may be attractive to retirement investors.

A Fundamental Difference

The vast majority of ETFs are market cap weighted1. So by design, they tend to hold more of a stock as its price is going up and less as it’s going down. We believe this has the potential to overweight overvalued stocks and underweight undervalued stocks, potentially exposing investors to higher risks and lower returns. WisdomTree weights securities in our equity Indexes by metrics of fundamental value like dividends or earnings, because we believe these are better indicators of a stock’s fiscal health than its price alone.

*Ordinary brokerage commissions apply. Holdings are displayed daily on the website. Investors can buy - or sell - shares at any time throughout the day. Diversification does not eliminate the risk of experiencing investment losses.

1 12b-1 fee: An annual marketing or distribution fee on a mutual fund; this fee is considered an operational expense and is included in a fund’s expense ratio.

2 Omnibus basis: When transactions of two or more account holders are combined under one merchant account; the individual account holders' identities remain undisclosed.

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Investors should carefully consider the investment objectives, risks, charges and expenses of the Funds before investing. U.S. investors only: To obtain a prospectus containing this and other important information, please call 866.909.WISE (9473), or click here to view or download a prospectus online. Read the prospectus carefully before you invest. There are risks involved with investing, including the possible loss of principal. Past performance does not guarantee future results.

You cannot invest directly in an index.

There are risks associated with investing, including possible loss of principal. Foreign investing involves currency, political and economic risk. Funds focusing on a single country, sector and/or funds that emphasize investments in smaller companies may experience greater price volatility. Investments in emerging markets, real estate, currency, fixed income and alternative investments include additional risks. Due to the investment strategy of certain Funds, they may make higher capital gain distributions than other ETFs. Please see prospectus for discussion of risks.

WisdomTree Funds are distributed by Foreside Fund Services, LLC, in the U.S. only.

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